Finance Minister Nirmala Sitharaman presented her ninth budget in the Indian Parliament. This budget is not merely a statement of expenditure, revenue, investment, and debt; it also reflects the political direction of the BJP-led Hindutva government under Prime Minister Narendra Modi, whose vision has consistently emphasised the centralisation of power, minimal government intervention, and the corporatisation of the economy. In this model of planned capitalism, citizens are reduced to consumers, limited to those who can access the market.
Politically speaking, the budget indicates that the government is retreating from its responsibilities towards the people, scaling back welfare measures for the working poor while extending tax benefits to business houses and large corporations. There is little in this urban-biased budget to support the hard-working, tax-paying people living in rural India. It offers long-term tax-free advantages to global platform companies, undermining the growth and potential of Indian technologically advanced companies.
The budget reveals that the Modi government is reducing allocations for fourteen ministries, including Agriculture and Farmers’ Welfare, Atomic Energy, Civil Aviation, Consumer Affairs, Telecommunications, External Affairs, Defence (Civil), Revenue, Water Resources, Drinking Water and Sanitation, Road Transport and Highways, Skill Development and Entrepreneurship, Steel, and Women and Child Development. These cuts appear to be a prelude to privatisation and outsourcing, signalling that the government is abandoning its responsibilities towards the people to create profitable conditions for corporations. Notably, the allocation for the Jal Jeevan Mission has been slashed from ₹67,000 crore to ₹17,000 crore, indicating that the Modi government is failing to ensure safe and adequate drinking water for Indian citizens.
The central government’s revenue receipts have fallen by ₹78,086 crore, and total expenditure has declined by ₹1,00,503 crore. Revenue as a percentage of GDP has fallen from 9.4 per cent to 9 per cent for the financial year 2027. Budgeted tax revenue has declined from 7.5 per cent to 7.3 per cent of GDP, while budgeted non-tax revenue has fallen from 1.9 per cent to 1.7 per cent. Although there is a slight increase in capital expenditure, overall government spending has decreased by 0.3 per cent of GDP. These numbers reveal that the Modi government, and its Hindutva-driven political economy, is not only directionless but has also failed to steer the Indian economy towards meaningful development. This combination of ignorance and arrogance characterises the Modi-led Hindutva government, which appears devoid of a coherent economic policy or a clear understanding of how to navigate a world marked by uncertainty.
The budget also states that “the debt-to-GDP ratio is estimated to be 55.6 per cent of GDP in BE 2026–27, compared to 56.1 per cent of GDP in RE 2025–26. A declining debt-to-GDP ratio will gradually free up resources for priority sector expenditure by reducing the outgo on interest payments. In RE 2025–26, the fiscal deficit has been estimated at par with BE 2025–26 at 4.4 per cent of GDP. In line with the new fiscal prudence path of debt consolidation, the fiscal deficit in BE 2026–27 is estimated at 4.3 per cent of GDP.” However, this marginal decline in the debt-to-GDP ratio and fiscal deficit is largely symbolic and meaningless in the larger context of the Indian economy. It underscores the Modi government’s failure to formulate a robust economic strategy capable of steering the economy towards meaningful development.
The Union Government’s Receipt Budget 2026–2027 (page 55, Annex-9) reveals the debt position of the Government of India. It states that “the outstanding internal and external debt and other liabilities of the Government of India at the end of 2026–2027 are estimated at ₹2,14,82,050 crore, as against ₹1,97,18,016 crore at the end of 2025–2026 (RE).” This implies that, if the projections hold, the per capita debt by 2027 will be approximately ₹1,46,745. Every Indian is, therefore, placed under a growing burden of debt.
This is the net outcome of the debt-driven economic policy pursued by the Modi government. It undermines India’s economic growth potential and weakens the conditions necessary for future development. While ordinary citizens are pushed deeper into debt, corporations are provided with every advantage to consolidate and expand their wealth. The Modi government functions as a corporate-oriented administration, prioritising profits while socialising risks and liabilities. By doing so, it jeopardises the economic future of the country, placing ordinary people under the weight of debt while leaving the government visionless and ineffective.
The budget does not address the pressing challenges faced by India and its people, including poverty, unemployment, health and education deficits, economic marginalisation, and rising inequalities. It also fails to respond to international challenges such as trade imbalances, the climate crisis, US tariffs, and other global conflicts that could adversely impact the Indian economy. Instead, this budget rewards corporations while placing a heavier burden on working people. This outcome is not accidental; it reflects Modi’s vision of minimal government intervention and maximum governance to accelerate corporate profits. Consequently, the budget lacks economic credibility and public confidence, as well as a coherent political vision for sustainable growth and development.
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*Academic based in the UK
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